The Congressional Budget Office (CBO) disclosed on Monday that the federal spending deficit has already reached nearly $1 trillion in the first seven months of the 2023 fiscal year. According to CBO estimates, the federal budget deficit for this period stands at $928 billion, which is $568 billion more than the same period last year.
Republican senators have expressed their concerns about the current trajectory of the economy, with 41 of them pledging to oppose raising the debt ceiling unless “substantive spending and budget reforms” are implemented. These senators argue that unsustainable fiscal policies are causing the economy to free fall, urging for fiscal reforms and opposing any bill that raises the debt ceiling without addressing these issues.
It is only May, but the government has already borrowed $928 billion in our name so far this fiscal year. For comparison, the budget deficits for the *entirety* of fiscal years 2017, 2018, and 2019 were $665, $779, and $984 billion, respectively. https://t.co/Rfj4E0ybpl
— Declan Hurley (@DeclanMHurley) May 8, 2023
In a recent ABC News/Washington Post survey, 54% of American adults believe that former President Donald Trump handled the economy better than President Joe Biden, whose overall job approval rating stands at just 36%. This indicates a lack of confidence in Biden’s economic management, as Americans struggle with slowing growth, bank failures, and persistent inflation.
President Biden’s refusal to accept less than a “clean” increase in the federal government’s borrowing limit without tying it to spending cuts has created tension between his administration and Republicans. House Speaker Kevin McCarthy (R-CA) and other Congressional leaders are set to discuss raising the debt ceiling with the president, but there is skepticism that Biden will follow through on any promises to reduce spending in the future.
As the U.S. faces the possibility of defaulting on its debt, Treasury Secretary Janet Yellen warned of “an economic and financial catastrophe” if the country fails to pay its obligations. With the so-called “X” date by which the U.S. will run out of money moved up to June 1, Yellen urged that debt ceiling negotiations should not take place “with a gun to the head of the American people.”
However, critics argue that the dire situation is a result of the Biden Administration’s excessive spending, with interest payments on the federal debt skyrocketing and tax revenues falling short. In the first six months of this fiscal year, the government’s deficit is expected to reach $1.1 trillion, $430 billion more than last year, with a $90 billion increase in interest payments and a 3% drop in revenues.
A recent report published by The Economist highlights that America’s budget deficit is set to balloon due to an aging population, growing costs of federal handouts, and rising government interest bills. This underscores the need for lawmakers to rein in spending and address the mounting fiscal challenges faced by the country.
With the public growing increasingly concerned about the connection between excessive federal spending and inflation, Republicans are calling for a return to baseline spending levels and cuts in spending to alleviate the problem. As the Biden Administration continues to face economic challenges and criticism for its spending policies, it remains to be seen whether the president will change course and work towards a more fiscally responsible path.